The pandemic caused major social and economic disruption. Following the first national lockdown in March 2020, the UK and devolved governments implemented a series of financial measures to mitigate the impact of restrictions. These policies were continued, sometimes in slightly revised form, during subsequent Covid waves in the autumn and winter of 2020–21.  

Although funding came from the UK government, with the devolved administrations receiving a share according to the Barnett formula, many business support schemes were administered by local authorities, which could provide some discretion on how to distribute resources. This explainer lays out the main economic support schemes provided by the UK government during the pandemic, how much they cost and who they benefited.

Other explainers document the support for wages and support for the unemployed in the UK, and internationally.  

How much did the government spend in total on support for individuals and businesses? 

The latest figures from the Office for Budget Responsibility (OBR, the UK’s official economic forecaster) estimate that government Covid support measures totalled £169bn since 2020. Most of this extra spending went to individuals, at £100bn, with the remaining £69bn spent on business support schemes. Almost two thirds of the total was spent in 2020/21 (£126bn), with forecasts for 2021/22 set at £44bn. 

When did support end? 

Support programmes were gradually phased out over the summer and early autumn of 2021 as public restrictions were lifted and the economy reopened. The final support measures to end – as part of the government’s ‘Living with Covid’ strategy – were the payments for self-isolation and the Coronavirus Statutory Sick Pay Rebate Scheme, in February and March 2022 respectively.  

Other programmes introduced during the pandemic but targeted at recovery include the Kickstart scheme, the Recovery Loan Scheme and the Job Entry Targeted Support programme, and are set to continue to March, June and September 2022 respectively.   

What support was provided for individuals? 

An unprecedented package of support for individuals was announced at the start of the crisis in March 2020. The bulk of support for workers was provided through the Coronavirus Job Retention Scheme (CJRS, or ‘furlough’) and the Self-Employment Income Support Scheme (SEISS). A £20 a week uplift in Universal Credit supported the lowest-paid and unemployed.  

These programmes were wide-ranging in their eligibility and benefited lots of people. Over the course of CJRS, 11.7m jobs were supported, out of a total of around 28.7m jobs eligible for furlough. Of the 5m self-employed workers in the UK, around 2.9m received at least one of the five SEISS grants. When the £20 a week uplift ended there were 5.7m people on Universal Credit. 

Following periods of lockdown, the government initiated different types of schemes to support people find work and encourage economic recovery. The Kickstart scheme provides job placements for people under 25: it has provided 217,000 placements with 100,000 applicants subsequently finding employment. As part of the Restart scheme, long-term unemployed Universal Credit claimants are provided with intensive job searching support under Job Entry Targeted Support. As of 5 January 2022 there had been 176,000 referrals to the programme.  

What support was provided for businesses? 

Business support consisted of a mix of grants, loans, and temporary tax cuts.  

The government guaranteed loans, either in part or in full, to provide liquidity to businesses across the economy and prevent insolvencies when uncertainty was too high for private-sector financial institutions to take on the risk. A total of 1.7m loans have been awarded across the five different schemes. By far the biggest scheme was the Bounce Back Loan Scheme (BBLS). These loans are only a cost to the taxpayer if they are not repaid. However, it is predicted that many will not be repaid either due to subsequent business failure or fraud.  

Business grants – direct payments from government that didn’t need to be repaid – were designed to compensate businesses forced to close or significantly adjust operations due to restrictions. During the first lockdown in 2020 small businesses and firms in the retail, hospitality and leisure sectors received cash grants between £10,000 and £25,000. Over subsequent lockdowns in the autumn and winter of 2020–21 some 3m grants were paid out under the Local Restrictions Support Grants scheme. The government also waived business rates for hospitality and retail businesses and nurseries for the 2020/21 financial year, benefiting almost 400,000 businesses. 

The government also introduced other smaller measures to support businesses. It temporarily reduced the rate of VAT for hospitality businesses between July 2020 and March 2022, and introduced the Eat Out to Help Out scheme to encourage hospitality spending in August 2020.  

How did support provided change over the crisis? 

When support was initially announced, it was only expected to last for a few months, but the need for continuing restrictions led to extensions. The timeline shows how economic support programmes for individuals and businesses were adapted over the course of the pandemic. 

The government delivered a series of ‘mini-budgets’ through the crisis when changes to support programmes were announced. These had implications for tax and spending. The increasing cost of economic support is shown in the following graph. 

Has support returned to deal with new variants, such as Omicron? 

The government introduced its ‘Plan B’ Covid restrictions, which included working from home guidance, on 8 December 2021 and advised people to reduce social contacts. A £1bn package of support was announced on 21 December, which included grants of up to £6,000 for businesses in the retail, hospitality and leisure sectors and the government resumed paying statutory sick pay costs for small businesses. ‘Plan B’ measures expired as planned on 27 January with all remaining Covid regulations ending by 1 April.  

Summary of support for individuals

Scheme

Details of support

Duration

Estimated cost

Estimated beneficiaries

Support measures

Coronavirus Job Retention Scheme (CJRS)

 

Paid 80% of the wages of ‘furloughed’ workers, who remained attached to their employer but could not work, up to a limit of £2,500 per month.

From summer 2020 workers could return to work part time with the government continuing to support wages of unworked hours

 

Start: March 2020 

End: September 2021 

£70.0bn (HMRC cost up to 16 December 2021)[1] 

11.7m jobs supported (10.8m individuals benefitted as a worker could have had more than one job put on furlough)[2]

Self-Employment Income Support Scheme (SEISS) 

Scheme paid out five taxable grants which covered three months of 80% of average profits for the previous three years up to a maximum of £7,500 for grants 1, 3 and 4 (second grant was set at 70% up to a limit £6,570; for the fifth grant, those with a turnover reduction of 30% or less received only 30% of average profits, up to a limit of £2,850) 

Start: March 2020 

End: September 2021 

£28.1bn (HMRC Cost up to 28 October 2021)[3] 

2.9m individuals have received at least one grant[4] 

10.4m grants have been claimed in total[5] 

Universal Credit (UC) and Working Tax Credits (WTC) 

Payments to recipients of UC and WTC were increased by £20 a week, initially until April 2021. The UC uplift was continued for a further six months and WTC claimants were given a one-off additional £500 payment (equivalent to six months of £20 a week) 

Start: March 2020 

End: September 2021 

£8.7bn[6]  

5.8m people on UC when uplift ended 

Test and Trace Support Payment scheme 

One-off payment of £500 to people who are unable to work when they are asked to self-isolate by NHS Test and Trace 

Start: 28 September 2020 

End: 24 February 2022 

£279.2m (as of 16 March 2022[7]

558,335 successful claims[8]

Recovery measures (first announced at July 2020 fiscal event or later) 

Kickstart scheme 

Six-month work placements for 16–24-year-old unemployed; government covers national minimum wage, NICs and pension costs 

Start: September 2020 

End: Extended by Sunak in conference speech until 2022; applications closed 17 December 2021; funding continues to 31 March 2022 

Funding of £2.1bn allocated in July 2020 Plan for Job[9]; extra £500m announced in October[10]

130,000 young people started placements as of 8 February 2022[11]

Job Entry Targeted Support (JETS)

Tailored CV and interview coaching for people unemployed for more than three months

Start: 5 October 2020 (England and Wales); 25 January 2021 (Scotland)

Due to end: September 2022

£238m initial investment; October 2021 extension of Plan for Jobs schemes headline cost of £500m

176,000 have started on the programme with 43,000 having gone on to start work (as of January 2022)[12]

Stamp Duty and Land Tax (SDLT) cut

Threshold for paying SDLT on a residential property increased to £500,000

Temporary increase reduced to £250,000 three months before standard threshold of £125,000 reintroduced

Start: 8 July 2020

End: 30 June 2021 (£500k nil-rate)

End: 30 September 2021 (250k nil-rate)

£5.9bn[13]

1.7m property transactions were carried for the period of the SDLT holiday[14]

Summary of support for businesses

Scheme

Details of support

Duration

Estimated cost

Estimated beneficiaries

Coronavirus Statutory Sick Pay Rebate Scheme

 

Government paid statutory sick pay costs for up to two weeks (£95.85 a week) per employee for businesses with fewer than 250 employees

 

Start: 26 May 2020 for employers to claim for employees who were off sick after 13 March 2020

End: 30 September 2021 (for employees off before this date)

Restart: 21 December 2021 (in response to Omicron variant)

Final closure: 24 March 2022

£85m[1] 

N/A

Grants

Small Business Grant Fund 

Cash grants of £10,000 for businesses eligible for small business rate relief or rural rate relief  

Start: April 2020

End: 30 September 2020

£11.1bn[16] 

900,000 grants paid out [17] 

Retail, Hospitality and Leisure Grant Fund 

Cash grants of £10,000 (for businesses with a rateable value of under £15,000) or £25,000 (for businesses with rateable value between £15,000 and £51,000)

Start: April 2020

End: 30 September 2020

Local Restrictions Support Grants

Cash grants of £3,000 for businesses who were forced to close under the tier system of local restrictions from October 2020 (originally set at £1,500/£1,000 for large/small firms)

Start: 9 September 2020

End: Applications closed 31 March 2021

£7.8bn paid to local authorities; £5.3bn paid out to businesses (both open and closed payments)[18]

3m grants paid out (200,000 open grants and 2.8m closed grants) by local authorities  (businesses with multiple premises could receive one grant per premises and could receive multiple grants through time so fewer than 3m businesses actually received grants[19]

Additional Restrictions Grant 

Provided grants to local authorities to support businesses which require additional support and/or are not covered by other schemes. Eligibility determined by local authorities

Start: 31 October 2020 

End: 30 June 2021

£2.1bn paid to local authorities; £1.9bn paid out to businesses[20]

673,000 grants paid out by local authorities as of 27 February 2022[21]

Closed

business lockdown payment

A one-off cash grant of £9,000 was paid to businesses that were required to close due to the January 2021 national lockdown

Start: 5 January 2021

End: 31 March 2021

£3bn paid out to local authorities[22]

Same businesses who received the Local Restrictions Support Grants (Closed), which totalled 3m grants[23]

Restart grant

One-off grant of £6,000 to non-essential retail businesses to support reopening costs following end restrictions

Start: 1 April 2021

End: Applications closed 30 June 2021

£3.4bn paid to local authorities; £3bn paid out to businesses[24]

395,000 grants paid out by local authorities as of 1 August 2021[25]

Omicron Hospitality and Leisure Grant

One-off grants between £2,700 and £6,000 (depending on rateable value) for hospitality and leisure businesses in England and discretionary funding of £100m for local authorities to support the economy with the Omicron variant

Announced: 21 December 2021 (one-off scheme)

Grants in England: £635m paid out to local authorities; £305m paid out to businesses[26]

90,000 grants paid out by local authorities as of 27 February 2022[27]
Loans

Covid-19 Corporate Financing Facility (CCFF)

Bank of England purchase short-term debt in the form of commercial paper of larger firms to support their liquidity

Start: 17 March 2020

End: 23 March 2021

£37bn lent to companies participating in scheme. No estimate of losses yet.[28]

107 companies participated in scheme[29]

Coronavirus Business Interruption Loan Scheme (CBILS)

Government guaranteed 80% of loans up to a value of £5m to SMEs with annual turnover under £45m and paid interest and fees for the first 12 months.

Start: March 2020

End: 31 March 2021

Value of loans approved: £26.39bn[30]

Estimated write-offs over lifetime of scheme: £2.4bn[31]

110,000 facilities approved[32]

Coronavirus Large Business Interruption Loan Scheme (CLBILS)

Government guaranteed 80% of loans up to a value of £200m to larger businesses with annual turnover over £45m

Loans could be up to 25% of firm turnover and capped at £200m.

Unlike CBILS, government did not pay interest costs

Not available to businesses who were eligible for CCFF

Start: March 2020

End: 31 March 2021

Value of loans approved: £5.56bn[33]

Estimated write-offs over lifetime of scheme: £400m[34]

753 loans approved[35]

 

Bounce Back Loans

Government guaranteed 100% of loans of value between £2,000 and £50,000 and  paid interest and fees for the first 12 months.

Interest rate 2.5% after first year

Start: 4 May 2020

End: 31 March 2021

Value of loans approved: £47.36bn (of which £2bn has been repaid and £1.3bn has defaulted)[36]

Estimated write-offs over lifetime of scheme: £19.7bn[37]

1,560,309 loans approved[38]

Future Fund

Provided government loans of between £125,000 and £5m to non-listed UK based companies to match funding raised by private investors.

Eligibility required firms to have raised at least £250,000 in equity investment from third parties in the last five years

Start: May 2020

End: Closed to new applications on 31 January 2021

Value of convertible loans approved: £1.14bn[39]

Estimated write-offs over lifetime of scheme: £500m[40]

1,190 convertible loans approved[41]

Recovery Loan Scheme

Replaced Bounce Back Loans and CBILS/CLBILS.

Government guarantees 80% (falls to 70% from 1 January 2022) of loans or overdrafts of up to £10m (falls to £2m after 1 January 2022)

Start: 6 April 2021

Due to end: 30 June 2022

(Initially to 31 December 2021; extended in autumn budget to 30 June 2022, with modifications)

£1.06bn (as of 25 October 2021)[42]

Estimated write-offs over lifetime of scheme: £200m[43]

6,190 facilities approved[44]

Other

Business rates relief

Retail, hospitality and leisure businesses, and nurseries, in England had their business rates waived for the 2020/21 tax year. This was extended until 30 June 2021 when rates were reintroduced at a two-thirds discount

Start: 6 April 2020

End: 30 June 2021 (100% relief); 31 March 2022 (discounted by two thirds)

£16.6bn[45]

374,000 retail businesses and 8,000 nurseries eligible for discount[46]

Trade Credit Reinsurance Scheme

Government guaranteed up to £10bn of transactions to protect businesses against default of payment from companies they are selling goods to

Start: Backdated to 1 April 2020

End: 30 June 2021

£1.7bn[47]

Provided £210bn in insurance cover to 500,000 businesses[48]

VAT rate cut

VAT was reduced to 5% for hospitality businesses from July 2020 until September 2021 and to 12.5% from September until March 2022

Start: 15 July 2020

End: 30 September 2021 (5% cut); 31 March 2022 [PH1] (12.5% cut)

 [PH1]Some confusion here: check this

£8.3bn[49]

There were 192,000 trading businesses paying VAT in the accommodation and food service and the arts, entertainment and recreation sectors in 2020/21[50]

Eat Out to Help Out

Government provided 50% of the cost of food and/or non-alcoholic drinks at participating restaurants up to a cap of £10 a head

Start: 3 August 2020

End: 31 August 2020

£849m[51]

52,000 businesses registered[52]

160m meals served[53]


  1. www.gov.uk/government/statistics/coronavirus-job-retention-scheme-statistics-16-december-2021/coronavirus-job-retention-scheme-s…
  2. Ibid.
  3. www.gov.uk/government/statistics/self-employment-income-support-scheme-statistics-december-2021/self-employment-income-support-s…
  4. Ibid.
  5. Ibid.
  6. https://obr.uk/efo/economic-and-fiscal-outlook-october-2021/
  7. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1062993/NHS_Test_and_Trace_20220…
  8. Ibid.
  9. www.gov.uk/government/publications/a-plan-for-jobs-documents/a-plan-for-jobs-2020
  10. www.gov.uk/government/news/500-million-plan-for-jobs-expansion
  11. https://questions-statements.parliament.uk/written-questions/detail/2022-01-31/114984
  12. https://questions-statements.parliament.uk/written-questions/detail/2021-12-16/94330
  13. https://obr.uk/efo/economic-and-fiscal-outlook-october-2021/
  14. www.gov.uk/government/statistics/monthly-property-transactions-completed-in-the-uk-with-value-40000-or-above
  15. www.nao.org.uk/covid-19/cost-tracker/#
  16. www.gov.uk/government/publications/coronavirus-grant-funding-local-authority-payments-to-small-and-medium-businesses
  17. Ibid.
  18. Ibid.
  19. Ibid.
  20. Ibid.
  21. Ibid.
  22. www.nao.org.uk/covid-19/cost-tracker/
  23. www.gov.uk/government/publications/coronavirus-grant-funding-local-authority-payments-to-small-and-medium-businesses
  24. Ibid.
  25. Ibid
  26. Ibid.
  27. Ibid.
  28. www.bankofengland.co.uk/markets/covid-corporate-financing-facility
  29. Ibid.
  30. www.gov.uk/government/collections/hm-treasury-coronavirus-covid-19-business-loan-scheme-statistics#Coronavirus-Business-Interrup…
  31. https://obr.uk/efo/economic-and-fiscal-outlook-october-2021/
  32. www.gov.uk/government/collections/hm-treasury-coronavirus-covid-19-business-loan-scheme-statistics#Coronavirus-Business-Interrup…
  33. www.gov.uk/government/collections/hm-treasury-coronavirus-covid-19-business-loan-scheme-statistics#Coronavirus-Large-Business-In…
  34. https://obr.uk/efo/economic-and-fiscal-outlook-october-2021/
  35. www.gov.uk/government/collections/hm-treasury-coronavirus-covid-19-business-loan-scheme-statistics#Coronavirus-Large-Business-In…
  36. www.nao.org.uk/wp-content/uploads/2021/12/The-Bounce-Back-Loan-Scheme-an-update.pdf
  37. https://obr.uk/efo/economic-and-fiscal-outlook-october-2021/
  38. www.gov.uk/government/collections/hm-treasury-coronavirus-covid-19-business-loan-scheme-statistics#Bounce-Back-Loan-Scheme
  39. www.gov.uk/government/collections/hm-treasury-coronavirus-covid-19-business-loan-scheme-statistics#Future-Fund
  40. https://obr.uk/efo/economic-and-fiscal-outlook-october-2021/
  41. www.gov.uk/government/collections/hm-treasury-coronavirus-covid-19-business-loan-scheme-statistics#Future-Fund
  42. www.british-business-bank.co.uk/press-release/recovery-loan-scheme-offers-over-1bn-to-smaller-businesses/
  43. https://obr.uk/efo/economic-and-fiscal-outlook-october-2021/
  44. www.british-business-bank.co.uk/press-release/recovery-loan-scheme-offers-over-1bn-to-smaller-businesses/
  45. https://obr.uk/efo/economic-and-fiscal-outlook-october-2021/
  46. www.gov.uk/government/publications/covid-19-business-rates-reliefs-by-parliamentary-constituency
  47. www.nao.org.uk/covid-19/cost-tracker/#
  48. www.gov.uk/government/publications/statement-on-the-closure-of-the-trade-credit-reinsurance-scheme/joint-statement-on-the-closur…
  49. https://obr.uk/efo/economic-and-fiscal-outlook-october-2021/
  50. www.gov.uk/government/statistics/value-added-tax-vat-annual-statistics
  51. www.gov.uk/government/statistics/eat-out-to-help-out-statistics/eat-out-to-help-out-statistics-commentary
  52. Ibid.
  53. Ibid.
Update date: 
Thursday, March 31, 2022

Original source – The Institute for Government

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